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81-055 RES , RESOLUTION 81-55 RESOLUTION RECITING A PROPOSAL FOR AN INDUSTRIAL FACILITIES DEVELOPMENT PROJECT S GIVING PRELIMINARY APPROVAL TO THE PROJECT PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR APPROVAL OF SAID PROJECT TO THE COMMISSIONER OF SECURITIES AND REAL ESTATE OF THE STATE OF MINNESOTA AND AUTHORIZING THE PREPARATION OF NECESSARY DOCUMENTS AND MATERIALS IN CONNECTION WITH SAID PROJECT WHEREAS, ( a) The purpose of Chapter 474 , Minnesota Statutes, known as the Minnesota Municipal Industrial Development Act ( "the Act" ) as found and determined by the legislature is to promote the welfare of the state by the active attraction and encouragement and development of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment; (b) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly 0 rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land use which will provide an adequate tax base to finance these increased costs and access to employment opportunities for such population; (c) The City Council of the City of Elk River ( "the City" ) has received from Eugene P. Donahue ( "the Company" ) , a proposal that the City assist in financing a Project hereinafter described , through the issuance of a Revenue Bond or Bonds or a Revenue Note or Notes hereinafter referred to in this resolution as "Revenue Bonds" pursuant to the Act; (d) The City desires to facilitate the selective development of the community, retain and improve the tax base and help to provide the range of services and employment opportunities required by the population; and the Project will assist the City in achieving those objectives. The Project will help to increase assessed valuation of the City and help maintain a positive relationship between assessed valuation and debt and enhance the image and reputation of the community; ( e) The Company is currently engaged in the business of commercial real estate ownership, development and leasing. The Project to be financed by the Revenue Bonds is a postal service 111 facility to be located in the City and consists of the acquisition of land and the construction of buildings and improvements thereon and the installation of equipment therein, and will result in the Aft employment of up to 15 additional persons to work within the new facilities; ( f) The City has been advised by representatives of the Company that conventional , commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced , but the Company has also advised this Council that with the aid of municipal financing , and its resulting low borrowing cost, the Project is economically more feasible; (g) The City, pursuant to Minnesota Statutes , Section 474 .01, Subdivision 7b did place a notice, a copy of which with proof of publication is on file in the office of the Administrator-Clerk , of the public hearing on the proposal of the Company that the City finance the Project hereinbefore described by the issuance of its Revenue Bonds, said hearing to be held to determine whether it is in the best interest of the City to proceed with the Project and the City did conduct a public hearing pursuant to said notice on October 30 , 1981, at 7: 30 p.m. , at which hearing all persons who appeared at the hearing were .given an opportunity to express their views with respect to the proposal; ( h) No public official of the City has either a direct or indirect financial interest in the Project nor will any public • official either directly or indirectly benefit financially from the Project. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River , Minnesota , as follows : 1. The Council hereby gives preliminary approval , without any indication upon which the Company may rely that final approval will be given, to the proposal of the Company that the City undertake the Project pursuant to the Minnesota Municipal Industrial Development Act (Chapter 474 , Minnesota Statutes) , consisting of the acquisition, construction and equipping of facilities within the City pursuant to the Company' s specifications suitable for the operations described above as and if approved by the City and to a revenue agreement between the City and the Company upon such terms and conditions with provisions for revision from time to time as necessary, so as to produce income and revenues sufficient to pay, when due , the principal of and interest on the Revenue Bonds in the total principal amount of approximately $400 ,000 to be issued pursuant to the Act to finance the acquisition, construction and equpping of the Project; and said agreement may also provide for the entire interest of the Company therein to be mortgaged to the purchaser of the Revenue Bonds ; and the City hereby undertakes preliminarily to issue its Revenue Bonds in accordance with such terms and conditions as are approved by the City; 410 2. On the basis of information presented to this Council by the Company it appears that the Project constitutes properties , real and personal , used or useful in connection with one or more revenue- 2. producing enterprises engaged in any business within the meaning of • Subdivision 1 of Section 474 . 02 of the Act; that the Project furthers the purposes stated in Section 474 . 01, Minnesota Statutes; that the availability of the financing under the Act and willingness of the City to furnish such financing will be a substantial inducement to the Company to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the development of economically sound industry and commerce, to assist in the prevention of the emergence of blighted and marginal land , to help prevent chronic unemployment, to help the City retain and improve the tax base and to provide the range of service and employment opportunities required by the population, to help prevent the movement of talented and educated persons out of the state and to areas within the state where their services may not be as effectively used , to promote more intensive development and use of land within the City and eventually to increase the tax base of the community; 3. The project is hereby given preliminary approval by the City subject to compliance , as determined by the City in its sole discretion, with the following : ( a) The approval of the Project by the Commissioner of Securities and Real Estate; (b) Final approval by this Council , the Company , and the purchaser of the Revenue Bonds as to the ultimate details of • the financing of the Project; ( c) Compliance by the Company and the Project with the City' s "Resolution Setting Forth Criteria and Procedures for the Issuance of Industrial Revenue Bonds , " Resolution 79-5 , dated April 16 , 1979 ; (d) Compliance by the Company and the Project with the City' s land use plan and ordinances , including but without limitation the City' s Comprehensive Plan, Zoning Ordinance and Subdivision Ordinance ; ( e) The City' s determination that any public improvements associated with the Project are desirable and may be installed in a financially feasible manner ; and ( f) The City' s determination that the Project is of such a size and nature as to be compatible with existing uses located in the City. 4 . In accordance with Subdivision 7a of Section 474 . 01, Minnesota Statutes , the Mayor of the City is hereby authorized and directed to submit the proposal for the Project to the Commissioner of Securities and Real Estate , requesting her approval , and other officers, employees and agents of the City are hereby authorized to • provide the Commissioner with such preliminary information as she may require; 3. 5. The Company has agreed and it is hereby determined that any • and all costs incurred by the City in connection with the financing of the Project whether or not the Project is carried to completion and whether or not approved by the Commissioner will be paid by the Company; 6 . Larkin, Hoffman, Daly & Lindgren, Ltd . , acting as bond counsel , is authorized to assist in the preparation and review of necessary documents relating to the Project, to consult with the Company and the purchaser of the Revenue Bonds as to the maturities , interest rates and other terms and provisions of the Revenue Bonds and as to the covenants and other provisions of the necessary documents and to submit such documents to the Council for final approval; 7. Nothing in this resolution or in the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City for this purpose. The Revenue Bonds shall not constitute a charge , lien or encumbrance , legal or equitable, upon any property or funds of the City except the revenue and proceeds pledged to the payment thereof , nor shall the City be subject to any liability thereon. The holder of the Revenue Bonds shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Revenue Bonds or the interest thereon, or to enforce payment thereof against any property of the City. The Revenue Bonds shall recite in substance • that the Revenue Bonds , including interest thereon, are payable solely from the revenue and proceeds pledged to the payment thereof. The Revenue Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; 8. In anticipation of the approval by the Commissioner of Securities and Real Estate and the issuance of the Revenue Bonds to finance all or a portion of the Project, and in order that completion of the Project will not be unduly delayed when approved , the Company is hereby authorized at its risk to make such expenditures and advances toward payment of that portion of the costs of the Project to be financed from the proceeds of the Revenue Bonds as the Company considers necessary, including the use of interim, short-term financing , subject to reimbursement from the proceeds of the Revenue Bonds if and when delivered but otherwise without liability on the part of the City; 9 . The adoption of this Resolution does not constitute a guarantee or a firm commitment that the City will issue the Revenue Bonds as requested by the Company. The City retains the right in its sole discretion to withdraw from participation and accordingly not issue the Revenue Bonds should the City at any time prior to the issuance thereof determine that it is in the best interests of the City not to issue the Revenue Bonds or should the parties to the transaction be unable to reach agreement as to the terms and condi- tions of any of the documents required for the transaction; and 4 . 10. The actions of the Administrator-Clerk in causing public notice of the public hearing and in describing the general nature of 0 the Project and estimating the principal amount of the Revenue Bonds to be issued to finance the Project and in preparing a draft of the proposed application to the Commissioner of Securities and Real Estate, State of Minnesota, for approval of the Project, which has been available for inspection by the public at the City Hall from and after the publication of notice of the hearing, are in all respects ratified and confirmed. Adopted by the City Council of the City of Elk River , Minnesota, this 30th day of October , 1981. M_yor Attest: Administrat•'r-Clerk /- 111 III 5.